Homework Answers
| Answer: Recording a receivable for services provide on account. |
Explanation:
Accrual is the method of accounting different from cash system of accounting. Under, accrual system of accounting the revenue and expense transactions are recorded in the book of accounts as and when they are earned or due. Recordings of transactions under this system does not depends on cash received or paid. Doing a physical count of inventory at the end of a period is not an accrual system. Recording a receivable for services provide on account is a accruals. Because, services are provided on account and cash will be received in future. Receiving cash from a customer for work to be performed later is the cash system and not accruals. Paying cash upfront for a year's rent is a prepaid expenses and not accruals.
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